Exhibit 99.2
CAP CONTRACT ADMINISTRATION AGREEMENT
This CAP CONTRACT ADMINISTRATION AGREEMENT, dated as of March
30, 2005 (this "Agreement"), among JPMORGAN CHASE BANK, N.A. ("JPMorgan"), as
Cap Contract Administrator (in such capacity, the "Cap Contract Administrator")
and as Indenture Trustee under the Indenture referred to below (in such
capacity, the "Indenture Trustee"), and COUNTRYWIDE HOME LOANS, INC. ("CHL").
WHEREAS, CHL is a party to an interest rate cap agreement
between CHL and Barclays Bank PLC, as cap counterparty (the "Counterparty"),
with a Trade Date of March 24, 2006 and a reference number of 1135258B (the "Cap
Contract"), a copy of which is attached to this Agreement at Exhibit A;
WHEREAS, CWHEQ Revolving Home Equity Loan Trust, Series 2006-D
(the "Trust") has entered into an Indenture, dated as of March 30, 2005 (the
"Indenture"), between the Trust and the Indenture Trustee;
WHEREAS, simultaneously with the execution and delivery of
this Agreement, CHL is assigning all of its rights, and delegating all of its
duties and obligations (other than its obligation to pay the Fixed Amount (as
defined in the Cap Contract)), under the Cap Contract to the Cap Contract
Administrator, pursuant to the Assignment Agreement, dated as of the date hereof
(the "Assignment Agreement"), among CHL, as assignor, the Cap Contract
Administrator, as assignee, and the Counterparty;
WHEREAS, CHL desires that the Net Payments (as defined below)
on the Cap Contract be distributed to the Indenture Trustee for the benefit of
the Holders of the Benefited Notes to be applied for the purposes specified in
the Indenture and that the Excess Payments (as defined below) on the Cap
Contract be distributed to CHL;
WHEREAS, CHL and the Indenture Trustee desire to appoint the
Cap Contract Administrator, and the Cap Contract Administrator desires to accept
such appointment, to distribute funds received under the Cap Contract to the
Indenture Trustee and to CHL as provided in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
1. Definitions. Capitalized terms used but not otherwise defined in this
Agreement shall have the respective meanings assigned thereto in the Master
Glossary of Defined Terms attached to the Indenture.
Benefited Notes: The Class 1-A and 2-A Notes.
Calculation Period: With respect to the Cap Contract and any
payment made under such Cap Contract, the related "Calculation Period" as
defined in such Cap Contract.
Controlling Party: As defined in Section 5.
Cap Contract Account: The separate account created and
maintained by the Cap Contract Administrator pursuant to Section 3 with a
depository institution in the name of the Cap Contract Administrator for the
benefit of CHL and the Indenture Trustee on behalf of the Holders of the
Benefited Notes and designated "JPMorgan Chase Bank, N.A. for Countrywide Home
Loans, Inc. and certain registered Holders of Revolving Home Equity Loan
Asset-Backed Notes, Series 2006-D". Funds in the Cap Contract Account shall be
held for CHL and for the Indenture Trustee for the benefit of the Holders of the
Benefited Notes as set forth in this Agreement.
Day Count Fraction: With respect to the Cap Contract and any
Payment Date, the "Floating Rate Day Count Fraction" specified for the
Calculation Period related to such Payment Date in the Cap Contract.
Excess Payment: For any Payment Date, (a) with respect to any
payment received by the Cap Contract Administrator from the Counterparty in
respect of the Cap Contract for such Payment Date (other than any payment in
respect of an early termination of the Cap Contract), an amount equal to the
excess, if any, of such payment over the Net Payment for such Payment Date and
(b) with respect to any payment received by the Cap Contract Administrator from
the Counterparty in respect of an early termination of the Cap Contract received
during the period from and including the immediately preceding Payment Date to
and excluding the day immediately preceding the current Payment Date, an amount
equal to the excess, if any, of such payment over the Net Payment in respect of
such Payment Date.
LIBOR: With respect to the Cap Contract, the "Floating Rate
Option" as defined in the Cap Contract.
Net Payment: For any Payment Date, (a) with respect to any
payment received by the Cap Contract Administrator from the Counterparty in
respect of the Cap Contract for such Payment Date (other than any payment in
respect of an early termination of the Cap Contract), an amount equal to the
product of (i) the excess, if any, of (x) LIBOR, over (y) the related Strike
Rate, (ii) the lesser of (x) the related Notional Balance for such Payment Date
and (y) the Note Principal Balance of the Benefited Notes immediately prior to
such Payment Date and (iii) the Day Count Fraction, and (b) with respect to any
payment received by the Cap Contract Administrator from the Counterparty in
respect of an early termination of the Cap Contract received during the period
from and including the immediately preceding Payment Date to and excluding the
day immediately preceding the current Payment Date, an amount equal to the
product of (i) a fraction, the numerator of which is equal to the lesser of (x)
the related Notional Balance for the first Payment Date on or after the early
termination of the Cap Contract and (y) the Note Principal Balance of the
Benefited Notes immediately prior to the first Payment Date on or after the
early termination of the Cap Contract, and the denominator of which is equal to
the related Notional Balance for the first Payment Date on or after the early
termination of the Cap Contract and (ii) the amount of such payment received in
respect of such early termination. Notwithstanding the foregoing, in the event
that the Note Principal Balance of the Benefited Notes is reduced to zero prior
to the termination of the Cap Contract, the Net Payment for any
2
Payment Date following the Payment Date on which the Note Principal Balance of
the Benefited Notes is reduced to zero shall be zero.
Notional Balance: With respect to the Cap Contract and any
Payment Date, the "Notional Amount" specified for the Calculation Period related
to such Payment Date in the Cap Contract.
Responsible Officer: When used with respect to the Cap
Contract Administrator, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, any Trust Officer or any other officer of
the Cap Contract Administrator with direct responsibility for the transactions
contemplated hereby and also to whom, with respect to a particular matter, such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject.
Strike Rate: With respect to the Cap Contract and any Payment
Date, the "Cap Rate" specified for the Calculation Period related to such
Payment Date in the Cap Contract.
2. Appointment of Cap Contract Administrator.
CHL and the Indenture Trustee hereby appoint JPMorgan to serve as Cap
Contract Administrator pursuant to this Agreement. The Cap Contract
Administrator accepts such appointment and acknowledges the assignment to it of
CHL's rights under the Cap Contract pursuant to the Assignment Agreement. The
Cap Contract Administrator agrees to exercise the rights referred to above for
the benefit of CHL and the Indenture Trustee on behalf of the Holders of the
Benefited Notes and to perform the duties set forth in this Agreement.
3. Receipt of Funds; Cap Contract Account.
The Cap Contract Administrator hereby agrees to receive, on behalf of
CHL and on behalf of the Indenture Trustee for the benefit of the Holders of the
Benefited Notes, all amounts paid by the Counterparty under the Cap Contract.
The Cap Contract Administrator shall establish and maintain a Cap Contract
Account into which the Cap Contract Administrator shall deposit or cause to be
deposited on the Business Day of receipt, all amounts payable by the
Counterparty under the Cap Contract. All funds deposited in the Cap Contract
Account shall be held for the benefit of CHL and for the Indenture Trustee for
the benefit of the Holders of the Benefited Notes until withdrawn in accordance
with Section 4. The Cap Contract Account shall be an "Eligible Account" as
defined in the Indenture and, if the Indenture is satisfied and discharged in
accordance with its terms prior to the termination of this Agreement, the Cap
Contract Account shall be an account that would otherwise qualify as an
"Eligible Account" under the Indenture had such satisfaction and discharge not
occurred.
Funds in the Cap Contract Account shall remain uninvested.
The Cap Contract Administrator shall give at least 30 days' advance
notice to CHL and the Indenture Trustee of any proposed change of location of
the Cap Contract Account prior to any change thereof.
3
4. Calculations; Distribution of Payments; Delivery of Notices.
The Cap Contract Administrator hereby agrees to perform the
calculations necessary to distribute payments in accordance with this Section 4.
The Cap Contract Administrator shall perform such calculations based on (x) the
Note Principal Balance of the Benefited Notes provided by the Indenture Trustee
pursuant to the Indenture and (y) the Notional Balances, Day Count Fractions and
values of LIBOR provided by the Counterparty pursuant to the Cap Contract. The
Cap Contract Administrator shall, absent manifest error, be entitled to rely on
information provided by the Indenture Trustee and the Counterparty.
On the Business Day of receipt of any payment from the Counterparty,
the Cap Contract Administrator shall withdraw the amount of such payment from
the Cap Contract Account and distribute such amounts sequentially, as follows:
(a) first, to the Indenture Trustee, the applicable Net Payment;
and
(b) second, to CHL, the applicable Excess Payment, in accordance
with the following wiring instructions:
Beneficiary Account: BANK OF AMERICA NA-SAN FRANCISCO
FFED: 000000000
Beneficiary: COUNTRYWIDE HOME LOANS, INC.
A/C: 12352 06200
The Cap Contract Administrator shall prepare and deliver any notices
required to be delivered under the Cap Contract.
5. Control Rights.
The Controlling Party shall have the right, but not the obligation, to
direct the Cap Contract Administrator with respect to the exercise of any right
under the Cap Contract (such as the right to designate an Early Termination Date
following an Event of Default (each such term as defined in the Cap Contract).
For purposes of this Agreement, the "Controlling Party" shall mean, (i) if the
Note Principal Balance of the Benefited Notes immediately prior to the most
recent Payment Date (or, prior to the first Payment Date, the original Note
Principal Balance) is equal to or greater than 50% of the Notional Balance as of
such Payment Date (or, prior to the first Payment Date, the original Notional
Balance), the Indenture Trustee, and (ii) if the Note Principal Balance of the
Benefited Notes immediately prior to the most recent Payment Date (or, prior to
the first Payment Date, the original Note Principal Balance) is less than 50% of
the Notional Balance as of such Payment Date (or, prior to the first Payment
Date, the original Notional Balance), CHL.
6. Representations and Warranties of the Cap Contract Administrator. The
Cap Contract Administrator represents and warrants as follows:
(a) JPMorgan is duly organized and validly existing under the laws
of the jurisdiction of its organization and has all requisite
power and authority to execute and deliver
4
this Agreement and to perform its obligations as Cap Contract
Administrator under this Agreement.
(b) The execution, delivery and performance of this Agreement by
JPMorgan as Cap Contract Administrator has been duly
authorized by JPMorgan.
(c) This Agreement has been duly executed and delivered by
JPMorgan as Cap Contract Administrator and is enforceable
against JPMorgan in accordance with its terms, except as
enforceability may be affected by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in
a proceeding in equity or at law).
7. Certain Matters Concerning the Cap Contract Administrator.
(a) The Cap Contract Administrator shall undertake to perform such
duties and only such duties as are specifically set forth in
this Agreement.
(b) No provision of this Agreement shall be construed to relieve
the Cap Contract Administrator from liability for its own
grossly negligent action, its own gross negligent failure to
act or its own misconduct, its grossly negligent failure to
perform its obligations in compliance with this Agreement, or
any liability that would be imposed by reason of its willful
misfeasance or bad faith; provided that:
(i) the duties and obligations of the Cap Contract
Administrator shall be determined solely by the
express provisions of this Agreement, the Cap
Contract Administrator shall not be liable,
individually or as Cap Contract Administrator, except
for the performance of such duties and obligations as
are specifically set forth in this Agreement, no
implied covenants or obligations shall be read into
this Agreement against the Cap Contract Administrator
and the Cap Contract Administrator may conclusively
rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Cap
Contract Administrator and conforming to the
requirements of this Agreement that it reasonably
believed in good faith to be genuine and to have been
duly executed by the proper authorities respecting
any matters arising hereunder;
(ii) the Cap Contract Administrator shall not be liable,
individually or as Cap Contract Administrator, for an
error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Cap Contract
Administrator, unless the Cap Contract Administrator
was grossly negligent or acted in bad faith or with
willful misfeasance; and
(iii) the Cap Contract Administrator shall not be liable,
individually or as Cap Contract Administrator, with
respect to any action taken, suffered or omitted to
be taken by it in good faith in accordance with the
direction of
5
the Controlling Party, or exercising any power
conferred upon the Cap Contract Administrator under
this Agreement.
(c) Except as otherwise provided in Sections 7(a) and 7(b):
(i) the Cap Contract Administrator may request and rely
upon and shall be protected in acting or refraining
from acting upon any resolution, officer's
certificate, certificate of auditors or any other
certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine
and to have been signed or presented by the proper
party or parties;
(ii) the Cap Contract Administrator may consult with
counsel and any opinion of counsel shall be full and
complete authorization and protection in respect of
any action taken or suffered or omitted by it
hereunder in good faith and in accordance with such
opinion of counsel;
(iii) the Cap Contract Administrator shall not be liable,
individually or as Cap Contract Administrator, for
any action taken, suffered or omitted by it in good
faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it
by this Agreement;
(iv) the Cap Contract Administrator shall not be bound to
make any investigation into the facts or matters
stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or
document, unless requested in writing so to do by CHL
or the Indenture Trustee; provided, however, that if
the payment within a reasonable time to the Cap
Contract Administrator of the costs, expenses or
liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Cap
Contract Administrator not reasonably assured to the
Cap Contract Administrator by CHL and/or the
Indenture Trustee, the Cap Contract Administrator may
require reasonable indemnity against such expense, or
liability from CHL and/or the Indenture Trustee, as
the case may be, as a condition to taking any such
action; and
(v) the Cap Contract Administrator shall not be required
to expend its own funds or otherwise incur any
financial liability in the performance of any of its
duties hereunder if it shall have reasonable grounds
for believing that repayment of such funds or
adequate indemnity against such liability is not
assured to it.
(d) CHL covenants and agrees to pay or reimburse the Cap Contract
Administrator, upon its request, for all reasonable expenses
and disbursements incurred or made by the Cap Contract
Administrator in accordance with any of the provisions of this
Agreement except any such expense or disbursement as may arise
from its negligence, bad faith or willful misconduct. The Cap
Contract Administrator and
6
any director, officer, employee or agent of the Cap Contract
Administrator shall be indemnified by CHL and held harmless
against any loss, liability or expense incurred in connection
with any legal action relating to this Agreement, or in
connection with the performance of any of the Cap Contract
Administrator's duties hereunder, other than any loss,
liability or expense incurred by reason of willful
misfeasance, bad faith or negligence in the performance of any
of the Cap Contract Administrator's duties hereunder. Such
indemnity shall survive the termination of this Agreement or
the resignation of the Cap Contract Administrator hereunder.
Notwithstanding anything to the contrary in this Section 7(d),
any expenses, disbursements, losses or liabilities of the Cap
Contract Administrator or any director, officer, employee or
agent thereof that are made or incurred as a result of any
request, order or direction of any Noteholders made to the
Indenture Trustee as contemplated by Section 5.12 of the
Indenture and consequently made to the Cap Contract
Administrator by the Indenture Trustee shall be payable by the
Indenture Trustee out of the security or indemnity provided by
any such Noteholders pursuant to Section 6.01(c)(5) of the
Indenture.
(e) Upon the resignation of JPMorgan as Indenture Trustee in
accordance with the Indenture, (i) JPMorgan shall resign and
be discharged from its duties as Cap Contract Administrator
hereunder and (ii) the Person that succeeds JPMorgan as
Indenture Trustee shall be appointed as successor Cap Contract
Administrator hereunder upon its execution, acknowledgement
and delivery of the instrument accepting such appointment in
accordance with Section 6.11 of the Indenture, whereupon the
duties of the Cap Contract Administrator hereunder shall pass
to such Person. In addition, upon the appointment of a
successor Indenture Trustee under the Indenture, such
successor Indenture Trustee shall succeed to the rights of the
Indenture Trustee hereunder.
8. Miscellaneous.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
(b) Each of JPMorgan and CHL hereby irrevocably waives, to the
fullest extent permitted by applicable law, any and all right
to trial by jury in any legal proceedings arising out of or
relating to this Agreement.
(c) This Agreement shall terminate upon the termination of the Cap
Contract and the disbursement by the Cap Contract
Administrator of all funds received under the Cap Contract to
CHL and the Indenture Trustee for the benefit of the Holders
of the Benefited Notes.
(d) This Agreement may be amended, supplemented or modified in
writing by the parties hereto.
(e) This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts
(including by facsimile transmission), and
7
all such counterparts taken together shall be deemed to
constitute one and the same instrument.
(f) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
(g) The representations and warranties made by the parties to this
Agreement shall survive the execution and delivery of this
Agreement. No act or omission on the part of any party hereto
shall constitute a waiver of any such representation or
warranty.
(h) The article and section headings in this Agreement are for
convenience of reference only, and shall not limit or
otherwise affect the meaning of this Agreement.
[SIGNATURE PAGE FOLLOWS]
8
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Cap Contract Administrator
By: /s/ Xxxxx Xxxxxxxxxx
---------------------
Name: Xxxxx Xxxxxxxxxx
Title: Attorney-In-Fact
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but
solely as Indenture Trustee
By: /s/ Xxxxx Xxxxxxxxxx
---------------------
Name: Xxxxx Xxxxxxxxxx
Title: Attorney-In-Fact
COUNTRYWIDE HOME LOANS, INC.
By: /s/ Xxxx Xxxxxxx, Xx.
----------------------
Name: Xxxx Xxxxxxx, Xx.
Title: Senior Vice President
ACKNOWLEDGED AND AGREED:
CWHEQ REVOLVING HOME EQUITY LOAN TRUST, Series 2006-D
By: Wilmington Trust Company,
not in its individual capacity but
solely as Owner Trustee
By:____________________________________
Name:
Title:
EXHIBIT A
CAP CONTRACT
A-1
